August 2021 - David Veksler

McAllen, Texas is consistently the fattest city in America, and they are not happy about it. They can’t figure out why, as they have plenty of parks and organize 5K runs nearly every weekend.

What they don’t realize is that for non-athletes, exercise has very little to do with bodyweight.
The obesity epidemic is caused almost entirely by the consumption of processed carbohydrates, which the U.S. government and the medical establishment still encourages despite many decades of evidence to the contrary.

My city of Denver is the healthiest in mainland America, but walking around town, the obesity epidemic is still evident.

What’s interesting is the comparative rate of obesity in different grocery stores. Whole Foods shoppers have 1/10th the rate of obesity than mainstream grocery store shoppers. (According to researchers at the University of Washington.)

Yes, Whole Foods is about 15% more expensive, but what are the shoppers buying? A 15% markup on food for a 90% decrease in obesity rates would be a great trade-off. Is simply switching to Whole Foods a viable diet plan?

Most of the price difference is the much higher price of meat, dairy, and seafood (30% more) at Whole Foods. The prices of most other products are comparable to mainstream stores.

The difference between Whole Foods and Kroger shoppers is all in the name: Whole Foods customers prefer whole foods, not endless derivations of processed corn syrup.

5 strategies I used to reach financial independence

My portfolio growth rate over the last 6 years has averaged 130% of my salary. In other words, my portfolio increased by 100% of my salary plus 30%. My actual saving rate was between 60 and 70%.

More importantly, over this period my portfolio* grew from about 4x my burn rate to 22x my burn rate. This metric is key because 25x is the standard retirement escape velocity, according to the 4% rule. The 4% withdrawal rule is the rule of thumb used by most financial analysts to predict the percentage of a portfolio a retiree can safely withdraw without drawing down his principal.

Here are five ways I accomplished my financial goals:

My portfolio growth rate over the last 6 years has averaged 130% of my salary. In other words, my portfolio increased by 100% of my salary plus 30%. My actual saving rate was between 60 and 70%.

Here are five ways I accomplished my financial goals:

1 Rent instead of buy:

I held out buying my first home as long as I could until covid-19 forced my hand. While homeownership is great for a growing family, renting for nearly the first 20 years of my career was crucial.

The financial tradeoff of rent vs buy is complicated. In short, over the long run, home prices merely keep up with inflation, while the stock market provides a 7% return. On average, it takes about 5 years to break even on the buy vs rent decision.

More importantly, renting allowed me to focus on my career. I could quit my work and move across the country or the world without worrying about a home full of material possessions to drag me down. And I did – moving from Dallas to New York City to Shanghai to Atlanta to Denver within 10 years. I never had to worry about mowing lawns, broken washes, or leaky roofs. It’s possible to throw money at these problems, but avoiding the distraction allowed me to focus on growing my income instead.

2 Track your spending:

You can’t improve what you can’t measure. It’s essential to track your cash flow (both in and out) to improve your situation. I’ve tried dozens of apps to do this, but the key was tracking my finances in Personal Capital – a free tool that tracks your cash flow and investments. The results speak for themselves – it took the first 15 years of my career to save 4x my burn rate. After installing Personal Capital, it took me 6 years to save 22x my burn rate.

Personal Capital can do budgets, but I’ve never kept a budget. Budgeting is a terrible way to think about money.

Let me repeat that: a monthly budget is a terrible way to manage your money.
If something delivers more value to you than it’s worth, you should pay for it. Who cares what you paid for it last month? Every few years, I will go out and spend a fortune on new work clothes, or a computer, or a new car, or (recently) a home improvement project. Who cares how much I spent on it the previous month?

What matters is not how your spending compares to a previous period, but how it compares to the next-best use. For example, before I spent $1000 on a new suit, I will calculate the total return if I saved the money instead. For example, $1000 invested over 30 years will be worth about $8000. Will I value spending $8000 when I’m 70 more than $1000 today?
Your timeline will be different of course – it depends on what percentage of your income is saved for retirement vs upcoming major purchases. The point is that you should balance each potential purchase against the time-discounted value of the next-best purchase, whether that is an iPhone next month or a yacht 40 years from now. It takes time and data to make this calculation automatic and intuitive, which is why a personal finance platform like Personal Capital is key.

3 Single-income household:

My family is a single-income, two-child family – my wife has been a parent and/or a student since we got married. While many see this as a disadvantage, I’ve come to see the benefits of a stay-at-home parent.

The cash flow of a second income is easy to see, but the costs are not so obvious. Aside from higher taxes, work-related expenses, running a household with kids has a lot of overhead, and working parents usually have to throw money at problems to stay afloat.
It’s virtually impossible for both parents to fully dedicate themselves to a career without neglecting their children. Something has to give – either one parent will sacrifice their career, or both will have mediocre career progress. By focusing on parenting, my wife can let me focus on my career during the day, so I can support her needs as a student at night.
Second, because we homeschool, we have very low childcare costs. We took our daughter out of an expensive Montessori school because we found that she learned better at home. Our kids will probably go back to school at some point, but for now, homeschooling is efficient both financially, time-wise, and particularly in giving me the necessary mental break to focus on work each day.

4 Choose side hustles that further your career:

I encourage developing a “side hustle,” but many people get hustles that do more harm than good. The proper function of a side hustle is not to earn a few extra dollars — it’s to grow your value proposition and train for a life of financial independence and entrepreneurship.
Many people get a side hustle that distracts rather than enhances their career. Driving Uber at night or hosting Airbnb guests every night is not going to enhance your career unless your dream is to be a chauffeur or enter the hospitality industry. Same with being a jack-of-all-trades who takes whatever job he comes across.

Is your side hustle causing you to sleepwalk through the workday or work on your gigs from the office? Are you spending more money on tools and supplies for each new gig that you bring in? Are you growing as a professional and building a sustainable, revenue stream with customers that come back to you, or are you doing random, one-off jobs, often for free? Are you giving up new projects at work, a promotion or a demanding new job for your side hustle? If so, it’s holding you back rather than helping you. You don’t need more spending money: you need to create opportunities for you to grow.

A good side hustle should help you to grow in your career or to explore a new one. You should come to the office excited to try out new ideas, not just tired from staying up all night working in an unrelated field. Side projects in your current field often allow you to be in charge of a small project and use the latest technology or techniques that are too risky or difficult to approve with your boss. I’ve used this trick to qualify for jobs that I couldn’t dream of otherwise.

5 Invest aggressively:

After maximizing the spread between your income and your expenses, you need to leverage the magic of compound returns by investing it in the market.

There are as many opinions on investment strategies as there are investors, but unless investing in the market is your full-time job, you will probably not beat the market. You may get lucky, but chances are that if you try timing the market, you will be guided by your emotions, and buy high and sell low. Even the best money managers in the world can’t beat the market.
So my suggestion is: just invest in the market. The whole market, not just the S&P 500. You can either invest in an index fund like VTI (USA) + VEU (not USA) or use a robo-trader that buys individual stocks (this can lower costs and save on taxes).

I use Personal Capital. I can’t speak for other robo-traders, but Personal Capital re-balances my portfolio not only by asset class, but also by market sector, so I’m positioned to benefit from growth in any industry.

By portfolio, I am referring to liquid securities and some real estate. I have other assets like business interests, but I’m trying to keep this advice universal.

Restore deleted rides from your Wahoo bike computer

How to restore accidentally deleted rides from your Wahoo Bolt/Roam/etc bike computer:

Get the Android SDK platform
Connect your Element Bolt, Roam, etc via USB
In a command line window, run ./adb devices. This is just to check that adb can see your Wahoo device.
Run ./adb pull /data/media/0/exports ~/Desktop/wahoo_exports with the last part being the folder you want to save to. This will export every single ride to your PC. Your deleted ride(s) will be there. Look by the date.
You can now sync the deleted ride. I airdropped the deleted ride to the ELEMNT app. That was enough for it to sync.

Adding complexity to a system does not make it more valuable

Every month, my company spends about $50K on software development. We’ve been doing this for 10 years. We think that we’re building something valuable well into the future.
Yet if the company went bankrupt, our work will instantly become worthless. Our business system serves our unique needs and would be useless in any other context. Likewise, if enough senior developers left at the same time, the business might be OK, but without in-depth knowledge, we would have to start over with the code.
Our code only has value when it makes money for the business. Like a living being, it only has value when it contributes to a common purpose (profit) and begins to disintegrate the moment that purpose is gone.
One difference between living and constructed things is that all of the parts of a living being are usually necessary for its function. If you remove any part of it, you will kill it, or at least imperil its ability to survive.
A complex codebase on the other hand usually serves multiple goals, and these goals change over time. Inevitably, some parts of the system become irrelevant to the system’s well-being.
98.5% percent of human DNA does not code for any proteins. It’s “junk” DNA. While not entirely useless, it’s a relic of evolutionary history. Given enough time, the same happens with any codebase.
This month, I tried to remove a feature from the codebase. It’s a small and simple feature, but one of the oldest. I found that I couldn’t get rid of it. Various parts of our system made certain assumptions that broke when the feature was removed. Subtle interactions caused things to break in unpredictable ways. This feature had wormed itself into the deepest layers of the logic engines and removing it broke dozens of unit tests.
I gave up and put the feature back in the backlog. I considered paving over the complexity by hiding it from the user, while letting it run in the background, like a vestigial organ. In fact, the feature had never been useful, but it took years for the business to admit that the tens of thousands spent on it were wasted. If we had recognized this earlier, stripping it out would have been much easier.
Adding complexity to a system does not make it more valuable — it makes it more costly to maintain. Humans have high-calorie needs because our brains require a lot of energy to run. Nature didn’t give us the largest brains it could, but the smallest brains that we could survive with. Human brains are mostly full of heuristics that provide shortcuts to perceiving and simulating reality just well enough to keep us alive long enough to reproduce. Likewise, software systems should have the minimum complexity needed to satisfy business requirements.